Isidro Rizal of TDC Sport, Antonio Castro Hermida of Giro 180, Leopoldo Nieto of Quorum Sport, Pedro Solis of Coas Sport Trade and Alberto Santurino of Deportes Cronos have announced that their five buying groups, or central purchasing bodies (CPBs), will be collaborating on sales, services and purchasing. They are calling their coalition G5, now the biggest grouping of independent retailers in Spain.
The establishment of the new purchasing cluster looks like a logical and inevitable move in a country where these and other relatively small buying groups act as a sort of regional wholesalers for their affiliated independent sports retailers. They are often shunned by some major brands because of their small size, although they can help secure the retailers' payments. Individually, they have less bargaining power than bigger individual Spanish voluntary groups like Intersport and Base, which are affiliated with Intersport International and Sport 2000 International, respectively.
Speaking to the Spanish trade paper Diffusion Sport, Castro Hermida, chief executive of Giro 180 and the coalition's spokesman, insisted that G5 was not a merger but instead an attempt to establish synergies between independent groups, rather like the collectives that exist in the pharmaceuticals industry. Indeed, the five groups have established no formal contract beyond a cooperative agreement.
Apparently years in the making, the arrangement came to fruition when the groups finally planned out their first joint action: a buyers' convention to be held for the autumn/winter 2019/20 season in Madrid on Feb. 9-10, 2019, right after the Ispo Munich show. Some 30 brands are expected to take orders from an estimated 100 buyers representing some 180 stores at the Rafael Hoteles Atocha. The convention will be open and free of charge for all retailers in the sector. They need only register by sending an e-mail to info@G5grupo.com.
The buyers' convention is an interesting initiative in a country that no longer has its own national sporting goods trade show. Intersport, Base and other relatively large buying groups hold their own internal buying days with the brands. For this season, Cronos will be holding its own previously scheduled convention on Jan. 18-19 at its usual location in Talavera de la Reina, near Toledo. In the future, however, Cronos will be joining its four partner groups for a common convention.
Representing 226 stores, Cronos Sport contributes the largest number of points of sale to the coalition, followed by Quorum Sport with 65, Coas Sport Trade with 48, Giro 180 with 37 and TDC Sport with 35. This brings G5's total to 411 stores, elevating the group to the top spot in Spain – ahead of Twinner Iberia, Base Detall Sport, Intersport and Atmósfera Sport, each of which federates more than 300 POS.
Just as it has no common management, G5 is projecting no common image to its clients, as there is no single marketing plan at the moment. According to CMD Sport, however, sources within the group say that the subject is open for debate.
Moreover, Castro Hermida has reportedly indicated that G5 is open to expanding the coalition, as long as the business philosophy of a new member is compatible. The question was never raised during the initial negotiations because of their very nature. G5 is the result of pre-existing, informal connections between the leaders of the five CPBs: five executives who knew one another professionally and had long been exploring the idea of working together.
In a recent interview with CMD Sport, Álvaro Otal, head of Spain's National Association of Purchasing and Services Groups (Anceco), had a number of things to say about developments like G5. In contrast with other retail sectors, he said, voluntary groups in the sporting goods sector have become increasingly subservient to the power of leading brands. Because of their market draw, the big brands effectively set strategies for everyone else, undermining the value of the CPBs and the retailers that helped establish the brands in the first place.
Another problem for the development of CPBs, Otal continued, is that competitive needs vary from one member to another. It is difficult to reconcile the demands of companies that operate with different sales volumes and different geographical locations. The solution here, according to Otal, is a broadening of the perspective.
He suggested at Anceco's recent congress on Nov. 22 that purchasing can no longer be the focus of CPBs. Digitalization has gone beyond computers to begin transforming fundamental processes, and soon, he concluded, CPBs will have to be instrumental dealing with all aspects of the retail trade.
